Innovation environment in India is still very difficult: Kiran Mazumdar-Shaw

Biocon’s chairperson and managing director Kiran Mazumdar-Shaw says the credibility of Indian innovation is so poor, doctors don’t want to risk original innovation. Photo: Aniruddha Chowdhury/Mint

Bangalore: Kiran Mazumdar-Shaw founded Biocon Ltd in 1978 with an initial investment of Rs.10,000 in a rented car garage. She went on to build the company into India’s biggest biotechnology firm with revenue of Rs.2,538 crore in the year ended 31 March. In an interview, chairperson and managing director Mazumdar-Shaw, 60, who trained as a master brewer in Australia before becoming an entrepreneur, spoke about the Indian model of innovation, the development of the Alzumab treatment for psoriasis patients and the nation’s compulsory licensing policy. Edited excerpts:

How challenging is it to be an innovator in India?

Innovation environment in India is still very difficult. It is so tough to get regulatory approvals. We have leveraged India’s cost and talent base—the India innovation model—to do our research. If we have to do this development in any other part of the world, it would have cost us 5-10 times (more).

We are a company that has some excitement in translational clinical research. All doctors in our country are much more focused on clinical practice than research. So to get doctors to do this (Alzumab) trial was very challenging. We had a handful of doctors who acted as if they were doing us a favour during phase 2 trials. The moment we had results, people started enrolling for phase 3.

The credibility of Indian innovation is so poor, doctors don’t want to risk original innovation. If the same trial is offered by a multi-national pharmaceutical company, doctors will happily participate. Biocon struggled because it was a lone player but if an ecosystem starts evolving where more companies are involved in original research, it will be easier to get a buy-in from stakeholders.

You think the government fosters innovation?

I am very concerned about the wrong signals we are sending to the world. We have not done anything substantial to build India as a strong global economy. We have wasted a lot of opportunities. We behave like the world needs us and our policy needs to be accepted by the global community. Over the years, we have sent all the wrong signals for investment in the country with the General Anti-Avoidance Rules (GAAR), retrospective taxation in Vodafone case and taxation anomalies in special economic zones (SEZs) which took a long time to be set right. The government has created a business-unfriendly climate. They have systematically destroyed investor climate in the country. Whatever measures are good for the elections are bad for the economy and vice- versa.

In the past couple of years, some high-profile patent litigations have gone against the innovator company. You think government policies concerning the pharma sector need to be revisited?

We have lost sight of practical reality. We are only talking about how the poor man is suffering and how anything to do with wealth creation is bad. We have gone back to the old era of socialistic values where anyone wealthy should feel guilty about it. This business of redistributing wealth rather than creating new wealth is a huge step backwards.

Healthcare is the softest target for any economic policy. Today, the government has abdicated its responsibility to provide basic healthcare to its people but it’s pointing a gun at the industry and saying “you provide it”. The industry has worked very hard to create a cost-effective and competitive sector. It is actually producing the cheapest drugs in the world, but on top of that the government is saying they don’t want the industry to make that much profit either. Which industry has this sort of draconian regulation that tells you how much profit you are allowed to make?

What is your take on using compulsory licensing (CL) as a way of making drugs affordable?

India is respecting IPR (intellectual property rights). I don’t think there is any getting away from that, but this whole notion of compulsory licensing based on affordability has to be booted out. I think CL based on drug shortage or public health emergency or pandemic is fine. But you can’t be issuing CL because of the affordability...if you really want compulsory licensing, then one must be fair to the innovator. Are you willing to give the innovator a hefty license fee as an annual recurring fee? Then let’s see if Indian companies are willing to make that payment and still willing to work in this area. Why can’t the government subsidize it through bulk procurement?. This sort of a draconian drug policy will see a lot of Indian companies simply stop manufacturing essential drugs. And ultimately the government will import them at a higher cost so it defeats the whole purpose.

All this is electioneering jargon and (it is) very difficult to make sense of it.

We are being ruled by activists, PILs (public interest litigations) and courts with regulators having no role to play today in any issue. All sectors have to be led by science, data and evidence. Pharmaceutical sector is the only industry where IPR is so critical. And our domestic companies don’t innovate so they would rather not have patent restrictions.

Going forward, what are the challenges facing Biocon as far as development of this molecule (Alzumab) is concerned?

The biggest challenge we have today is to build up the credibility of Indian innovation and we are trying to do that. If you find a partner who is credible he might be able to get this product in the market sooner.

As we move forward, we are trying to be as thorough as possible... We are not very fussed about the trials for other diseases. All of that will happen in due course. We don’t need to rush into it but we need more credibility to combat a lack of credibility Indian innovators have.